Webjet (WEB)

Online travel agent
Webjet
was one of the standout stocks in the sector in 2012, and as the local market matures it is looking to growth offshore through acquisitions such as the recently completed takeover of the Zuji brand in Hong Kong and Singapore in addition to Australia. The $US25-million takeover, funded in full by a targeted capital raising, expands Webjet’s revenue base while giving it a larger share of the profitable domestic market. After a 65 per cent rise so far in 2012, the stock is pricey at 19.9 times forward earnings – a premium to larger competitor Wotif.com, which is trading at a multilple of 17.9 times earnings. But analysts point to Webjet’s more rapid recent growth, and the potential for a merger between the two rivals at some stage – a deal that would unlock value for shareholders of both, though it’s still just speculative. With more analysts recommending holding than buying Webjet due to its valuation, taking a position now require a call on the likelihood of that end-game scenario.